Kuwait announced it would expel the Philippine ambassador and recall its envoy from Manila after videos emerged of its embassy staff conducting "rescue operations" for Filipinos fleeing from allegedly abusive employers in the capital.
This comes despite the Philippines apologising for what Kuwait called "a breach of their sovereignty".
News agency KUNA said the Philippine ambassador had been given a week to leave oil-rich Kuwait, adding tension to a spat between the two nations triggered by the discovery of a Filipina's body in an abandoned apartment in Kuwait City.
One clip shows a man rushing to assist a woman into a black vehicle carrying diplomatic licence plates, while another depicted a person running from what looked like a construction site and speeding off in a car.
Kuwaiti Deputy Foreign Minister Khalid Al Jarallah said on Tuesday that the embassy had violated the country's sovereignty and that it failed to work with the local authorities.
The Philippines’ Foreign Secretary Alan Peter Cayetano apologised for the rescue operations, admitting that although most rescues were conducted in co-operation with the Kuwaiti police, some “emergency” cases were launched by embassy staff alone.
"I apologise to my counterpart and we apologise to the Kuwaiti government, the Kuwaiti people and the leaders of Kuwait if they were offended by some actions taken by the Philippine embassy in Kuwait," he told reporters in Manila.
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Two embassy workers involved in the operations were arrested in Kuwait and are being held by the authorities, according to Kuwait News Agency (Kuna).
Tuesday's apology follows the work ban placed by Filipino President Rodrigo Duterte, whose move to ban workers from an Arabian Gulf country is not unprecedented.
The Philippines government imposed a similar ban on the UAE last year after reports emerged of workers being abused.
Mr Duterte alleged that some Arab employers routinely abuse their Filipina workers, force them to work up to 21 hours a day and feed them scraps.
Mr Duterte has since engaged in negotiations, most recently meeting with the Kuwait ambassador to the Philippines. Prospects of a worker agreement are under way, with the president previously saying he will visit Kuwait to witness the signing of the accord.
The Philippines' ambassador to Kuwait has also offered a public apology after he made comments about his diplomatic mission's efforts to help Filipina housemaids in the Gulf nation.
Renato Villa read from a statement in Kuwait City on Tuesday.
He said that Mr Cayetano had also apologised to Kuwait "for the actions that were undertaken by the embassy … to assist Filipino nationals in grave distress here in Kuwait but which the government … found unacceptable”.
About 10 million Filipinos work abroad and the money they send back is a lifeline of the Philippines economy.